The Badger Account 2014-2015

A message from Terry Warfield, chair of the Department of Accounting and Information Systems

The Badger Account Year in Review

News about our students and faculty—their activities, awards, and accomplishments

2014–2015

From ethics and professionalism to the global mindset initiative

DEPARTMENT OF

ACCOUNTING & INFORMATION SYSTEMS

LETTER FROM THE CHAIR

TERRY WARFIELD PwC Professor in Accounting at the Wisconsin School of Business and chair of the Department of Accounting and Information Systems

Welcome to the 2015 issue of The Badger Account!

We have a lot of news to report. I hope you will enjoy catching up on what we have been doing. Let me provide a brief overview from the chair’s perspective.

Additional detail is provided elsewhere in the newsletter.

You can also follow happenings in the department at:

As mentioned in prior newsletters, the Ph.D. program has benefitted from our recruitment of accounting doctoral scholars (ADS). This program, sponsored by several public accounting firms and the American Institute of Certified Public Accountants (AICPA), provides support for students leaving public accounting to pursue careers as auditing or tax professors.

We have had six ADS candidates in our program (two graduated this past year). With the ADS program ending, we embarked on a Ph.D. alumni fundraising campaign to bolster resources to support the Ph.D. program. As announced at the Ph.D. alumni reunion in Madison in August, we have raised more than $500,000 in donations and pledges, which will help our doctoral program continue to be an important contributor to our research enterprise.

go.wisc.edu/wsbaccounting First, the department continues to support the Wisconsin School of Business vision that public universities must join forces with the business community to guide research opportunities, inform learning experiences, and generate the inspiring ideas and leaders that will propel us all forward.

As discussed within this year’s newsletter, the Department of Accounting and Information Systems has been active in the past year to advance the School’s three strategic pillars—focused research excellence, inspiring learning experiences, and an exemplary learning community.

With respect to research excellence, with the on-boarding of eight new faculty over the past two years, our group has been exceptionally productive on the research front. As detailed in the faculty recognition section, we have published more than 12 scholarly articles and textbooks in the past year.

Several faculty have external grants to support their research projects, many of which are in collaboration with Ph.D. students. Additionally, Mark Covaleski was awarded the School’s top research award, and our faculty are quite visible and are lead organizers at scholarly research conferences.

Our doctoral program is a key contributor to our research mission. Indeed, our new hires over the past two years all specifically commented on the strength of our program and its students as a key factor in choosing Wisconsin over other schools. This year, we admitted two new students (the Ph.D. program currently has 13 students). As discussed in the Ph.D. program section, one of our students, Kara Obermire, was recognized with a national dissertation award, and several of our Ph.D. students have national visibility through their roles as presenters and/or discussants at various research conferences.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

With respect to inspiring learning experiences, in the past year we built on our comprehensive curriculum, which articulated our learning outcomes around the themes of knowledge, doing, being, inspiring, and networking (KDBIN™). Following consultation with our advisory board (and with the support of a $25,000 grant from PwC), we completed development and offered the Capstone course to 24 students in their final year of the MAcc program (42 students are enrolled for the second year). As discussed further within the newsletter, students in this innovative course complete a module-based three-credit class over the course of a full graduate year. The Capstone course offers a unique opportunity to address new topics and expand on exposure to topics introduced in prior coursework, utilizing an evidenced-based practice model.

Indeed, our Capstone course serves as a model for the School’s emerging “Compass to Capstone” initiative.

Our Capstone offering complements and builds on the range of co-curricular activities (discussed in the newsletter)—the Future is Now, Ethics and Professionalism Program, case competitions, and internships (supporting doing, being, inspiring,

and networking), our active student groups (supporting being and networking), and active engagement with our alumni (supporting networking). In addition, with support of a major grant from EY, we have developed and introduced a set of curricular and co-curricular elements within the Global Mindset Leaders Program. This program is designed to introduce students to cultural and social diversity in business and supports the School’s and department’s strategic focus on diversity.

As noted in prior newsletters, one of the most important tasks for a department chair is related to people.

This is the area which most reflects our contribution to an exemplary learning community.

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Our long-serving department academic specialist, Judy Schaeffer, retired in May. Before stepping down, Judy was recognized with the School’s Distinguished Classified Staff Service Award— a fitting recognition to cap a great career.

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Michele Parker, with prior experience at the UW Vet School and in the WSB dean’s office, joined us as our new academic specialist.

Welcome aboard, Michele!

• Ph.D. student Matt Kaufman received the Wisconsin School of Business Outstanding Graduate Student Teaching Award.

We continue to make progress on our strategic priorities.

In prior newsletters, we have noted that our highest priority was to increase enrollment in the undergraduate and masters programs. This year, I’m happy to report that we have nearly 410 upper division accounting majors—an increase of 10% in the number of majors relative to two years ago. The quality of our incoming students has remained constant. As a result of the increase, we have the largest pledge class in Beta Alpha Psi and another large class admitted to our MAcc program (111 in Spring 2015). Looking forward, we aim to continue the trend of increasing enrollment, along with increasing diversity in the student population.

Given the growth trends, we could not be more gratified by our success in attracting tenure-track faculty to provide depth in our research and teaching capacity.

Finally, I’d like to express my gratitude for the support of our advisory board and to specially recognize the long-standing service of Mike Altschaefl (BBA ’81), who is stepping down this year from the board.

His counsel and engagement over the years has been most helpful. Welcome to Jason Schultz (BBA ’98, MAcc ’99, MBA ’08), our newest board member.

In summary, I am very proud of both our accomplishments over the past year and of our outstanding students. I hope you are as excited as I am about our future. Our success is due in large part to the contributions of our alumni and friends—and our future depends on your continued support. If you place value on your experience at Wisconsin, and if you feel you have benefited from your experience here, I hope you will consider making a contribution to the Department of Accounting and Information Systems at:

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We did well in student competitions last year, with strong showings by our student teams in the KPMG International Case Competition, the PwC xTAX Competition, and the Deloitte Tax Competition.

Our Deloitte Audit Case Competition team, led by Faculty Adviser Kristen Fuhremann, won the national competition!

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We also continue to place post-graduate interns at the Financial Accounting Standards Board (FASB) and Governmental Accounting Standards Board (GASB). This year, Matt Baker (MAcc ’15) began his work at the GASB, continuing our strong tradition of service to standard-setting boards.

Thank you!

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We continue to do well in the rankings of accounting programs, including a #2 ranking in CPA exam pass rates (three of our graduates earned the Sells Award last year) and a top five ranking (for programs with 15 or fewer faculty, top 20 overall) in the Public Accounting Report ranking of masters programs.

Terry Warfield PwC Professor in Accounting Department of Accounting and Information Systems Chair Wisconsin School of Business

go.wisc.edu/givetoaccounting.

WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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Ph.D. PROGRAM The Ph.D. program is a key contributor to the vibrancy of our research environment.

We congratulate Amanda Convery, Sean Dennis, and Patrick Hurley on their graduation from the Ph.D. program in May 2015. Amanda accepted a position with the University of Delaware, Sean with the University of Kentucky, and Pat with Northeastern University. We wish them all the best in their new endeavors.

WSB Ph.D. Hooding Ceremony, From L to R: Dean Franﾃｧois Ortalo-Magnﾃｩ, Patrick Hurley, Amanda Convery, Sean Dennis, Jasmine Feng (Management and Human Resources), Paul Davis (Management and Human Resources), and Senior Associate Dean for Faculty and Research Russ Coff

Welcome New Ph.D. Candidates The department extends a warm welcome to the two newest Ph.D. candidates who joined our program in the fall of 2015, Kimberly Walker and Erika Schwagerl.

Kimberly Walker Kimberly completed her Bachelor of Applied Science in accounting and Masters of Accounting窶的nformation Technology at North Carolina State University. Upon graduating, Kimberly worked as an IT Audit Associate with PwC and also held audit positions with Piedmont Natural Gas, Wells Fargo, and Carlisle Inc. Her primary focus included compliance (operational and IT) audits, SOX, and special projects. Kimberly spent time in Lima, Peru, as an English language teacher and has also been highly engaged in the National Association of Black Accountants (NABA) throughout her academic and professional career. Her most recent roles with NABA include director of student member services and director of the Southern Region Scholarship Committee. She is also a recipient of the AICPA Fellowship for Minority Doctoral Students.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

Current Ph.D. Students Earn Recognition Kara Obermire Ph.D. student Kara Obermire was awarded the American Accounting Association (AAA)/ Grant Thornton Doctoral Dissertation Award for Innovation in Accounting Education at the AAA annual meeting in Chicago, Illinois, on August 11, 2015.

Kara’s primary research interests include corporate governance and audit quality.

Her dissertation focuses on how audit committee members’ social identities and their corporate governance roles influence judgments, decisions, and overall committee effectiveness.

Professor Karla Johnstone, Kara’s Ph.D. dissertation chair, says, “This award is significant to the department and the School because it provides evidence to a broad array of academic researchers about the quality of the Ph.D. program at the UW–Madison. Kara’s research is particularly creative. Audit committees perform a critical role in maintaining companies’ corporate governance, so understanding these individuals’ judgments and decisions is central to understanding what makes companies function well (or, conversely, poorly). A particularly notable feature of Kara’s research is that she uses three distinct, but complementary, research methods: publicly available archival data from SEC filings, qualitative data from interviews with 26 practicing audit committee members, and experimental markets data obtained through the UW–Madison’s BRITE Laboratory. Her ability to leverage these methodologies illustrates not only the depth and breadth of her analysis skills, but also speaks to the quality and versatility of the Ph.D. training available at our university.”

Matt Kaufmann Ph.D. student Matt Kaufmann was recognized at the Wisconsin School of Business’s annual spring awards ceremony for excellence in teaching. Matt was awarded the Henry C. Naiman Outstanding Graduate Student Teaching Award. Matt supported more than 30 teaching assistants and 1,600 students, over two years, in coordinating the delivery of the Introductory Financial Accounting course.

Erika Schwagerl Erika obtained her Bachelor of Science in business administration with a major in accounting from Kansas State University. Erika began her career as an auditor for two years with EY in Kansas City, focusing mainly on financial services clients.

Erika’s broad research interest is in financial reporting.

WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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DOCTORAL ALUMNI CONFERENCE The Department of Accounting and Information Systems hosted a Doctoral Alumni Conference on August 6–7, 2015, preceding the American Accounting Association annual meeting in Chicago, Illinois.

More than 50 current and former doctoral candidates and faculty came together at the Fluno Center for Executive Education on the UW–Madison campus for the two-day conference. The program consisted of presentations by alumni, as well as current doctoral students and faculty on a wide range of topics. One of many highlights from the conference was a featured talk by Tom Linsmeier, 2008 Distinguished Accounting Alumnus and current Financial Accounting Standards Board member.

Other external speakers included: • Professor Jean Bedard (MS ’79, Ph.D. ’85), Bently University. “Coordination and Communication Challenges in Global Group Audits” • Professor Qing Burke (Ph.D. ’13), Miami University. “An Empirical Examination of Mark-to-Market Accounting for Corporate Pension Plans” • Professor Qiang Cheng (Ph.D. ’02), Singapore Management University. “Seeing is Believing: Do Analysts Benefit from Site Visits?”

• Professor Victoria Dickinson (Ph.D. ’06), University of Mississippi. “Accounting Rules and Post-Acquisition Profitability in Business Combinations” • Professor D’Arcy Becker (BBA ’82, MBA ’84, Ph.D. ’91), University of Wisconsin–Eau Claire. “Symbolic Versus Substantive Regulatory Disclosure Requirements: The Case of Ford Motor Company in the Early 1900s” • Professor Cass Haussermann (Ph.D. ’14), Portland State University. “Don’t Get Even, Get Rich: The Influence of Financial Incentives, Revenge, and Proximity on Tax Whistleblowing” • Professor Sergey Komissarov (Ph.D. ’10), University of Wisconsin–La Crosse.

“Conservatism and Accountants’ Responsibility for Sustainable Public Pensions” • Professor William Bollom (retired) shared his perspectives with the conference attendees on what it has meant to him and his career to be a Badger accounting Ph.D. Terry Warfield also reported on the success of a Ph.D. alumni fundraising campaign, with $150,000 in contributions received to date and an additional $338,000 pledged. The conference wrapped up on Friday afternoon with a social hour at the Memorial Union Terrace overlooking Lake Mendota.

L to R: Karla Johnstone, Helen Brown-Liburd, Sandra Shelton, and Dereck Barr-Pulliam

Front L to R: Greg Trompeter, Mark Kohlbeck, Back Left: Erika Schwagerl

Ph.D. Alumna Earns Recognition The PhD Project, an award-winning program designed to increase diversity in management, announced its 2014 Hall of Fame inductees. Among this year’s honorees is Dr. Sandra W. Shelton (Ph.D. ’94), professor of accounting, DePaul University. The PhD Project established the Hall of Fame in 2011 to recognize a select few who have inspired many. These individuals have sustained an unwavering commitment to The PhD Project’s mission, and their positive leadership has resulted in significant encouragement and impact within The PhD Project’s network of minority business doctoral students and faculty.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

MACC PROGRAMS Innovative Capstone Course The department offered a new, innovative Capstone course for master of accountancy students beginning in Fall 2014. The three-credit module-based course is designed to span the full academic year, meeting every two weeks, with opportunities to engage online discussion topics in between class sessions. The course offers the opportunity to address new topics and expand on topics introduced in prior coursework within a continuing professional development framework. Led by Professor Terry Warfield, the creation of the Capstone course was truly a collaborative effort with input from the department’s advisory board and topic delivery by several faculty members.

The course covered a variety of topics, including:

• Accounting Research, led by Professor Brian Mayhew

• Global Mindset in the Accounting Profession, led by Professor Karla Johnstone

• Accounting Changes, including an in-depth look at the recently issued revenue recognition standard, led by Professor Terry Warfield

• Analytics, led by Senior Lecturer Ann O’Brien

• Taxes and Decision-Making, led by Professor Stacie Laplante

• Governmental and Not-for-Profit Accounting, led by Senior Lecturer Tony Greig

Accounting Student Chosen For Prestigious Internship Recent graduate Matthew Baker (BBA ’14, MAcc ’15) was awarded a post-graduate technical assistant (PTA) internship at the Governmental Accounting Standards Board (GASB). Matt will be assigned to major agenda projects or to short-term practice and implementation issues. PTAs are involved in all phases of their assigned projects, including analyzing comment letters, reviewing published research, preparing memorandums on technical issues, and drafting due process documents. Matt began his one-year appointment in July 2015.

The Wisconsin MAcc program has a long tradition of sending students to PTA positions. Liesl Seiser (BBA ‘13, MAcc ‘14) and Andrea Willett (BBA ‘13, MAcc ‘14) recently completed their PTA internships at the GASB and FASB respectively.

WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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MACC PROGRAMS Professional Issues Course The Integrated Master of Accountancy (IMAcc) program admitted 114 students in Spring 2014 who completed internships in Spring or Summer 2015. Those students who completed a Spring 2015 internship returned to campus in April and participated in a three-week Professional Practice Issues in Accounting, Auditing and Taxation course led by Professor Karla Johnstone. The course allows students to use their internship experiences to build a foundation for their future development and begins to prepare students for graduate school.

This engaging course included several guest speakers with a variety of expertise. The format of the course is fast-paced and challenging, but provides a common bond for the students as they reflect on their time in the WSB. IMAcc student Brian De Vere, who also majored in music, helped conclude the course with a solo performance of University of Wisconsin– Madison school song, “Varsity,” on his trumpet.

FASB Member Tom Linsmeier gives a talk on standard setting

The course included several external speakers who engaged the students on variety of topics, including: • “Auditing Judgments Regarding Audit Quality,” Carla Gogin (BBA ’92), partner, Baker Tilly • “Internal Control and Perspectives from Two CFOs,” David Stockwell (BBA ’94), CFO, Therma-Stor LLC; and Dan Kelly (BBA ’84, MBA ’85), CFO, American Family Insurance • “Perspectives on Politics and Financial Reporting and Standard Setting,” Bob Herz, former chairman of the Financial Accounting Standards Board (FASB) and current member on The Sustainability Accounting Standards Board • “A Conversation with Mark Mendola,” Mark Mendola, U.S. tax leader and a vice chairman, PwC • “Tax Policy and Regulation,” Todd Watchmaker (BBA ’82), tax and lead relationship partner with UW–Madison; Matt Lorenz, tax managing director, and Jason Divine, federal tax senior manager, KPMG • “Center for Audit Quality and Financial Restatements,” Kevin Lavin, Center for Audit Quality Professional Practice Fellow •

“Financial Accounting Standards Setting and Regulation,” panel discussion with Tom Linsmeier (MBA ’80, Ph.D. ’85), FASB member; Andrea Willette (BBA ’13, MAcc ’14), senior consultant with Deloitte; Liesl Seiser (BBA ’13, MAcc ’14), senior consultant in M&A Transaction Services with Deloitte; Alex Debbink (BBA ’12, MAcc ’13), financial accounting advisory services senior at EY; and Taylor Paul (BBA ’09, MAcc ’10), Deloitte Manager, National Office Accounting Services

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“Your Professional Brand, Making Career Choices, and Lifelong Learning,” Dan Langer (BBA ’78), controller, UW–Madison Accounting Services; Zach Kowaleski (BBA ’08, MAcc ’09), Ph.D. student in the Wisconsin School of Business; Kim Howard, EY audit manager; Salman Aasi (MAcc ’14), analyst, Dispute Consulting, Duff & Phelps; Joe Paskov (BBA ’12, MAcc ’13), EY assurance associate; and Greg Jonas, PCAOB, director of research and analysis

• “Corporate Governance and the Role of the Audit Committee,” David Gay (BBA ’96), office managing partner, EY; and Wisconsin School of Business Emeritus Professor Larry Rittenberg, audit committee chairman, Woodward Governor • “Financial Reporting Judgments in the Real World,” Jim Walker (BBA ’82), associate dean and chief financial officer, Wisconsin School of Business

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

Farewell and Welcome Each May, the department celebrates the accomplishments of graduating MAcc students as they leave their student status behind and become Wisconsin Business Alumni. For spring graduation, 88 MAcc students had the opportunity to participate in the campus-wide commencement ceremony at Camp Randall stadium and hear from featured speaker Katie Couric. Later in the day the department hosted a celebration for the graduates and their families at the Memorial Union. Several faculty members joined Dean François Ortalo-Magné to personally congratulate the new graduates.

The graduating MAcc students demonstrated their gratitude for their time as Business Badgers by pledging to give back to the school. With guidance from the UW Foundation, the peer-driven commencement campaign resulted in 59% of MAcc graduates pledging to give back.

As we say goodbye to one MAcc class in the spring, we welcome a new class of graduate students each fall. We are excited to welcome 116 new MAcc students in Fall 2015. Students have the opportunity to take courses in accounting theory, strategic cost management, advanced audit and assurance, and corporate tax in addition to the innovative new capstone course. In addition to the challenging curriculum, 55 MAcc students will help advance the school’s teaching mission by leading introductory accounting courses for students in their first two semesters at the WSB.

MAcc graduate Jill Krattiger celebrating with Bucky

The department welcomes a new group into the two-year graduate-only Master of Accountancy (GMAcc) program WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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AWARDS BANQUET The Department of Accounting and Information Systems, along with the Sigma chapter of Beta Alpha Psi, held its annual awards banquet in September on the UW–Madison campus.

Scholarship recipients and fellowships for the 2015-2016 school year, and outstanding teaching assistants and seniors from the 2014-2015 academic year, were honored. Recognition was also given to the generous organizations and individuals who support the accounting program and its students.

The Douglas Clarke Memorial Teaching Award, awarded to outstanding Ph.D. teaching assistants, was awarded to Kara Obermire and Amy Tegeler.

The Teaching Assistant: Excellence in Teaching Award, awarded to outstanding MAcc teaching assistants, was awarded to Chris Louk (BBA ’14, MAcc ‘15) and Kelsey Straub (BBA ’13, MAcc, ’14).

These top-10 accounting graduates were recognized for their academic accomplishments:

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Samuel Adler Yedan Chen Andrew Debbink Robert Greco Benjamin Harvey

6. Kassandra Kaluzniak 7. Andrew Lamers 8. Christa Vander Pas 9. Fei Zhan 10. Taylor Zimprich Top ten graduating seniors accept their awards

Sandra Sponem (BBA ’80, MBA ’84) was honored as the distinguished accounting alumna. Sandy is the chief financial officer of Mortenson, Inc., one of the nation’s largest contractors and the 18th largest general builder in the country. At Mortenson, she is a senior vice president, serving on the senior leadership team, and has primary responsibility for accounting, financial reporting, treasury, taxes, planning and analysis, information technology, and executive benefit plans. As a senior leader, Sandy also sits on the company’s risk management team and its investment, compliance, employee benefits and development committees. Prior to joining Mortenson, she worked for Piper Jaffray Companies, Inc. for 15 years, most recently holding the position of chief financial officer. Sandy began her career at Deloitte and Touche and also worked for Dayton-Hudson Corporation.

In her remarks to the students at the banquet, Sandy encouraged students to consider the following guidelines as they progress through their career: 1. Take calculated risks. The most successful professionals often do not advance in a straight line. Take some risks, try new things, and reap the rewards.

2. Network. Building a personal and professional network will yield good opportunities and good friends.

3. Volunteer. Both in the traditional sense outside of work, but also at work.

Volunteer to take on a project that is new to you. It will pay off.

Distinguished Alumna Sandy Sponem and Professor Terry Warfield

4. Rely on your core values and education. Always stay true to who you are and lean on the solid educational foundation you received

Sandy’s remarks were well received and supported the recurring themes of professional development and lifelong learning throughout the awards ceremony.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

STUDENT GROUP UPDATES Beta Alpha Psi The Sigma chapter of Beta Alpha Psi contributed to the Wisconsin Idea last spring by participating in the Volunteer Income Tax Assistance (VITA) program in collaboration with the University of Wisconsin Credit Union. Twenty-three Beta volunteers completed VITA training and contributed more than 250 hours of service to help 240 taxpayers complete tax returns. Through these efforts, participants delivered more than $520,000 in federal and state refunds­—with no cost to their clients!

UW students were primarily helping UW employees. Beta members have been contributors to the VITA program over the past several years. According to the volunteer coordinator from the credit union, the students are the backbone of the program. Well done! And thanks to senior lecturer Tony Greig, who serves as faculty adviser for Beta.

Student Beta leaders attended the Beta National conference in Milwaukee in August 2015, where they presented to conference attendees on fundraising strategies and participated in community service and social activities with Beta groups from other universities.

The Sigma chapter was once again recognized as a distinguished chapter, with the goal of reaching superior status this year.

Beta student leaders attend a social event at the National Conference in Milwaukee along with Faculty Advisor Tony Greig

Institute of Management Accountants

Spring and Fall 2015 IMA Board Members

The student chapter of the Institute of Management Accountants (IMA) on the UW–Madison campus continued its success over the past academic year. Last spring alone the chapter hosted four professional speaker events and increased member attendance at those events by 50% compared to the fall semester. The IMA offers students who are new to the WSB the opportunity to learn about and explore career paths with a degree in accounting while also developing a long-lasting network—and having some fun! The group participated in a variety of networking and social events, including the Polar Plunge for Special Olympics. Faculty Adviser Russell Epp continues to provide strong leadership to the IMA students.

National Association of Black Accountants The UW–Madison student chapter of the National Association of Black Accountants (NABA) continues to grow and develop as a new student organization. Student leaders embrace the motto “Lifting as We Climb” by offering various development and mentoring opportunities for NABA members in addition to offering professional meetings where employers talk to the group about career opportunities and professional development topics.

NABA students attend a conference in Washington, D.C.

WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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CASE COMPETITIONS Accounting students have the opportunity each year to compete in various case competitions. The competitions require students to devote a lot of time and effort beyond their already busy academic schedules, but the benefits are certainly worth the commitment. Competing in these case competitions offers the students the opportunity to polish their research, analytical, teamwork, and presentation skills; network with professionals; and get a feel for the issues they will face upon entering the profession.

Accounting Students Win National Case Competition A team of five undergraduate business students competed in, and won, the Deloitte National Audit Case Competition held at Deloitte University in Dallas, Texas! Accounting students Steven Quinn, Joseph Vergeront, Alyssa Kroneberg, Erin Wolke, and Sara Nonn placed first in the regional competition in December 2014 to advance to the national competition held in March 2015.

WSB accounting students win first place at the Deloitte National Audit Case Competition in Dallas, Texas

“Going into the competition, I knew the students had put in the time and effort to do very well,” said Kristen Fuhremann, the team’s faculty adviser.

“They worked very hard on the technical research and understanding around a very complex topic as well as their overall professionalism in delivery to a panel of judges. They truly came together as a team—and had some fun along the way!”

There were six universities represented at the national competition, including UW–Madison, University of Southern California, Penn State, Michigan State, Clark Atlanta, and the University of Washington.

Each team was given a technical accounting case and needed to deliver a comprehensive solution in the form of a 25-minute presentation to a panel of three judges. By winning the competition, each student received a $2,000 scholarship and the university received $10,000. The team was supported by Kristen Fuhremann as a faculty adviser and Diane Craanen as a Deloitte adviser.

Student teams participated in a number of other case-based competitions: • PwC Extreme Tax Competition: Student teams must analyze a complex case involving a technical tax topic.

Advised by faculty member Al Talarczyk, student teams research the case, refine their presentation, and then present their solution to a panel of PwC judges.

• Deloitte Fantaxtic Case Competition: Each fall a team of students competes in a regional competition at Deloitte offices where they must evaluate a tax-based case study, prepare a creative and comprehensive solution, and present live to a panel of judges. Professor Stacie Laplante advises students who compete in this competition.

• KPMG International Business Case Competition: With only 48 hours to prepare, teams of four students must analyze a business case and prepare and present a comprehensive solution. The case topics can vary widely, giving students the opportunity to research and learn about business issues they may encounter in their professional careers. Students present to a panel of judges on campus to compete for an opportunity to move on to a regional competition. This competition culminates in an international competition with student teams who won their national competitions.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

ARTHUR ANDERSEN CENTER ACTIVITIES The Arthur Andersen Center provides an independent source of funding for department activities focused on accounting research, student development, and the accounting profession.

The Andersen Center funds The Future is Now, the department’s signature student development event. UW students interested in exploring academic and professional accounting opportunities attend a two-day event that brings together more than 40 alumni to deliver content in the areas of developing a personal brand, global mindset, professional competencies, career path exploration, team building, and leadership. The event is designed to attract students to the profession and start them on the path to becoming accounting professionals.

More than 100 students attend this event annually.

The Center sponsors a workshop series that invites scholars to present their research. Faculty, Ph.D. students, and MAcc students in the Capstone course attend these workshops to learn about cutting-edge accounting research.

We typically invite from four to six leading accounting scholars per semester and encourage presentations by our own faculty and Ph.D. students. Outside speakers meet with faculty and students one-on-one and in groups to discuss research and other professional issues. These meetings provide great networking opportunities and keep UW connected to the wider academic community. The workshop also serves an important role in recruiting new faculty; candidates present during on-campus visits, providing insights into their research and demonstrating their teaching skills.

External workshop speakers for the 2014-2015 academic year included: • Sandra Vera Munoz, Notre Dame University “Do Audit Firms’ Procedures Descriptions Communicate Quality of Service? An Experiment Applying New IAASB Assurance Standards” • Jean Bedard, Bentley University “Auditing Challenging Fair Value Measurements: Evidence from the Field”

Students participate in a team building exercise as part of The Future is Now

• James Chyz, University of Tennessee–Knoxville “Do Financial Analysts Reduce the Cost of Goodwill Impairment Decision?”

• Noel Harding, University of New South Wales “Differences in the Influence of a Superior’s Known Preferences on the Judgments of Auditors from Large and Small Firms” • Ken Merkley, Cornell University “Managers’ Early Reporting Decisions” • Tina Carpenter, University of Georgia “Can Transparency of Nonfinancial Measures Help Investors Identify Fraud Red Flags?”

Alum Carver Smith talks to students about professional and personal attributes of success

• Mary Ellen Carter, Boston College “Aggregate CEO Compensation, Aggregate Performance and Relative Performance Evaluation” • Ryan Wilson, University of Oregon “How Quickly Do Firms Adjust to Target Levels of Tax Avoidance?”

• Rani Hoitash, Bentley University “Measuring Accounting Complexity with XBRL” • Luzi Hail, University of Pennsylvania “A Tale of Two Regulators: Risk Disclosures, Liquidity, and Enforcement in the Banking Sector” • Tim Bauer, University of Illinois at Urbana-Champaign “Do auditors reach better fraud planning judgments when advising versus deciding?”

From L to R: Ben Wohlleber, Cameron Kerkhoff, Ray Wilson, Kara Biasca, Terry Warfield, Jason Parsons, and Bob Cottingham.

Professionals answer student questions at a dinner panel at The Future is Now

WISCONSIN SCHOOL OF BUSINESS | TOGETHER FORWARD

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STUDENT RECOGNITION WSB Accounting students continue to perform very well on the Uniform CPA exam.

For the 2014 testing period, UW–Madison ranked second in the nation in pass rates for first-time test takers and first in the nation when ranked against institutions of similar size.

Elijah Watt Sells Awards Katie Copouls (BBA ’14), Spencer Graczyk (BBA, ‘13), and Katie Poffenberger (BBA ’13) were recognized by the AICPA as top 2014 CPA exam performers.

The Elijah Watt Sells Award is given to candidates who have obtained a cumulative average score above 95.50 across all four sections of the Uniform CPA Examination and passed all four sections of the examination on their first attempt. A total of 91,384 individuals took the examination in 2014, with 60 candidates meeting the criteria to receive the Elijah Watt Sells Award.

Katie Copouls is a tax associate with EY in Minneapolis, MN. Katie started with EY in November 2014 in its financial services division.

Spencer is currently a senior accounting analyst with Dell in their Accounting Development Program. After completing his first rotation in services accounting in Austin, Texas, he moved on to the warranty accounting team in Panama City, Panama.

Katie Poffenberger is a tax associate with PwC in Chicago, Illinois. Katie started with PwC in July 2014.

Named for one of the country’s first CPAs, the Elijah Watt Sells Award program was established by the AICPA in 1923. Sells was active in the establishment of the AICPA and played a key role in advancing professional education in the field.

Katie Copouls

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Spencer Graczyk

ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

Katie Poffenberger

WICPA Scholarships Three IMAcc students—Andrew Debbink, Max Haraldsen, and Taylor Zimprich—were honored with scholarships from the Wisconsin Institute of Certified Public Accountants (WICPA) Education Foundation.

The WICPA Educational Foundation recognizes fifth-year students working toward the 150-hour requirement to sit for the CPA Exam. The award is based on academic achievement, a personal statement, and letters of recommendation. All three students were awarded the LeRoy Schmidt 150 Hour Accounting Scholarship.

PCAOB Scholarship IMAcc student Sam Lebewitz was honored with a scholarship from the Public Company Accounting Oversight Board (PCAOB). The award is based on academic achievement for a student pursuing a Master of Accountancy degree with an interest in joining the auditing profession. Sam earned this scholarship due to his outstanding academic achievement during his time in the WSB.

BBA Awards Accounting BBA Students Earn Accolades Each year the WSB holds a celebration of excellence ceremony the morning of graduation to recognize the outstanding accomplishments of graduating students. Accounting students Yelena Kovalenko and Taylor Zimprich were awarded the Harold E. Kubly Award, presented to honor two graduating students who have demonstrated excellent communication skills and who have a breadth of undergraduate educational experiences outside the traditional business curriculum.

Accounting students Andrew Debbink, Allison Sontag, and David Sweeney received the Robert A. Jerred Excellence Award. This award is presented to honor three graduating students who have demonstrated outstanding community service while maintaining academic excellence.

L to R: BBA award winners Andrew Debbink, Yelena Kovalenko, Taylor Zimprich, Allison Sontag, and David Sweeney

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GLOBAL MINDSET A generous donation from EY alumni and the EY Foundation supports the department’s continued leadership in the Global Mindset initiative, which introduces students to diversity in business and encourages embracing different perspectives in today’s global business environment. The department advances the initiative in a variety of ways: • Introducing the Global Mindset curriculum into required introductory accounting courses (Introductory Financial and Introductory Managerial Accounting). Enrollment exceeds 1,000 students per semester, enabling significant coverage of the topic School-wide.

• Engaging MAcc students in a Global Mindset module in their capstone course.

• Incorporating a Global Mindset module as part of the student professional development conference, The Future is Now. • Encouraging international travel. Karla Johnstone, EY Professor of Accounting, received the Fetzer Fellowship for the 2015-2016 academic year, which will support travel to China to present research workshops.

The department awarded the first Global Mindset Scholarships to seven students. Scholarship support is an integral component of the Global Mindset Leaders Program. The program will support students from incoming freshmen to graduate students. Recipients will meet regularly to foster mentoring and community.

We are excited to support the following students: • Jonathan Conduah, sophomore business student • Noro Daitri, junior business student • Nicholas Eufrasio, direct-admit freshman to the WSB • Ousmane Kabre, Master of Accountancy student • Kellan Lowry, direct-admit freshman to the WSB • Elijah Mapes, direct-admit freshman to the WSB • Amanda Morris, junior business student Global Mindset Scholarship recipients gather at the department’s annual fall awards banquet.

Student Global Mindset Experiences Master of Accountancy students Sam Lebewitz and Mai Lo were able to apply their Global Mindset education while completing internships.

During his internship with KPMG in Chicago, Sam lived and worked for one month in Johannesburg, South Africa.

After an intensive lesson in driving, culture, and geography, he worked with an international team on an audit for a goldmining client. Sam experienced the culture in trips to Cape Town and Kruger National Park.

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ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

Mai had an internship with PwC in Boston. She spent a week in Belize teaching financial literacy to young students.

The program focused on setting goals and entrepreneurship.

ETHICS AND PROFESSIONALISM PROGRAM The Howard Carver Ethics and Professionalism Program hosted two featured speakers during the 2014-2015 academic year. For news on the program’s student initiatives and its statement of values, see our website at: go.wisc.edu/aisethics

IMAcc students Max Haraldsen and Josh Frishmon promote ethics in the WSB atrium

Laura Francis, Consulting Chief Financial Officer As part of the Fall 2014 ethics events, the department hosted Distinguished Alum Laura Francis (BBA ’88) as our featured speaker. Laura is a consulting CFO in Silicon Valley, and previously served as CFO of a number of life-science companies, including Auxogyn Inc., Promega Corporation, and Bruker BioSciences Corporation. Earlier in her career, she was an engagement manager with McKinsey & Company and an audit manager with Coopers & Lybrand. Laura holds an MBA from Stanford University, and a BBA from UW–Madison.

Laura spoke on the role ethics has played in her career. She had the audience read a brief case study on a real ethics case involving the Foreign Corrupt Practices Act, then discussed the case study and how it was resolved.

Laura Francis was the featured speaker at the Fall Ethics Forum

Laura discussed examples of “gray-area” ethical scenarios, then gave the students advice on how to establish an ethical foundation from the start. She encouraged students to fully research the culture of the company they are working for and understand the company’s mission statement, commitment to employees, compensation structure, and leadership values.

Bob Herz Bob Herz, former Chair of the Financial Accounting Standards Board (FASB), spoke at the annual spring ethics symposium in April 2015. After leading the PwC Professional, Technical, Risk and Quality unit and serving on the International Accounting Standards Board (IASB), Bob was appointed chairman of FASB for two consecutive terms. He currently serves on the Sustainability Accounting Standards Board.

Bob shared some FASB experiences and focused on three main themes: the critical importance of good accounting to the efficiency of capital markets, the value of corporate reporting, and the importance of high standards of professionalism.

Bob Herz gives a public talk as part of the Spring Ethics Symposium

Bob emphasized the importance of maintaining a good reputation and encouraged students to consult in gray areas. He concluded by comparing the School’s KDBIN™ framework to the “Four P” framework he has adopted: • Passion–If you like what you do, you will be more successful.

• Pride–If you are proud of the work you do, you will produce a better, more valuable product.

• Professional–Place a high value on integrity and ethics throughout your career.

• People–Never underestimate the value of people and building life-long relationships

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FACULTY RECOGNITION

Mark Covaleski

Karla Johnstone

Mark Covaleski was awarded the 2015 Erwin A. Gaumnitz Wisconsin School of Business Research Award for career research pertaining to the use of accounting information for planning and control in organizations and society, as well as research pertaining to the evolution of the accounting profession compared to other professions in the United States.

Karla Johnstone, EY Professor of Accounting, is serving as the vice president of the auditing section of the American Accounting Association.

That role will transition to the role of president next year, followed by past president in the third year. Karla provides this service in addition to being an editor at Auditing: A Journal of Practice & Theory.

Karla Johnstone was awarded the dean’s Fetzer Fellowship for the 2015-2016 academic year.

This will include a two-week trip to China in March 2016 to present research workshops at several universities followed by a public talk on campus describing her travels and what she learned.

Emily Griffith Emily Griffith, assistant professor of accounting and information systems, was awarded a research grant from the Center for Audit Quality (CAQ) to investigate the factors that affect auditors’ cognitive processing. This is the second year in a row that Griffith has received a grant from the Washington, D.C.-based organization, which is closely affiliated with the American Institute for CPAs. Out of 34 research proposals, the CAQ selected Griffith’s and her colleagues’ project as one of the three projects to fund. Last year, Griffith and Wisconsin School of Business Ph.D. student Patrick Hurley (Ph.D. ’15) received the Access to Audit Personnel Program Award from CAQ, one of only four research teams in the country to receive the prestigious honor. CAQ is an autonomous public policy group dedicated to enhancing investor confidence and public trust in the global capital markets.

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Ella Mae Matsumura Ella Mae Matsumura, Robert and Monica Beyer Professor of Accounting, was named associate dean of full-time MBA programs for the WSB, effective August 1, 2015.

Stacie Laplante

Ann O’Brien

The American Taxation Association awarded the 2015 Best Manuscript Award to Professors Stacie Laplante and Ken Klassen (University of Waterloo) for the article, “Are U.S. Multinational Companies Becoming More Aggressive Income Shifters?” that was published in the Journal of Accounting Research. The award recognizes the best tax manuscript published in a leading journal in the prior three years.

Ann O’Brien, senior lecturer in Accounting and Information Systems has been selected as a 2015 teaching fellow in the UW–Madison Teaching Academy. The Academy was founded in 1993 with the purpose of promoting effective teaching and learning on this campus and nationally. In support of this goal, fellows encourage learning innovation, experimentation, and dialogue throughout the campus community and within their disciplines.

Stacie Laplante was appointed to the Board of Trustees of the American Tax Policy Institute (ATPI). Members and trustees of the ATPI are some of the leading experts on taxation from the fields of law, accounting, and economics.

ATPI´s primary purpose is to promote and facilitate nonpartisan scholarly research analysis and discussion of U.S. federal, state, and local tax policy issues. It supports cutting-edge scholarship in law, accounting or economics that will aid policy makers and administrators and improve our tax system.

Ann’s colleagues and students hold her in high regard and recognize her commitment to deep learning, her concern for students, and her willingness to innovate. In one of the nomination letters sent in support of Ann’s candidacy, her student stated, “[Professor O’Brien] explained that her goal was to prepare us for the ‘real world’ where we will be asked to do things which we do not know how to do.

When this happened, she hoped that we would remember how we once ‘taught ourselves’ to do the things, or to learn the topics, and then we can research with confidence.”

Tyler Thomas Assistant Professor Tyler Thomas was appointed to the editorial board of the Journal of Management Accounting Research.

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RESEARCH GRANTS, PUBLICATIONS, AND PRESENTATIONS Allee, K.D. and M. DeAngelis. “The Structure of Voluntary Disclosure Narratives: Evidence from Tone Dispersion.” Journal of Accounting Research, Volume 53, Issue 2, May 2015, pages 241–274. Presented at the 2014 Journal of Accounting Research Conference.

Allee, K.D., D. Lynch, K. R. Petroni, and J.H. Schroeder. “Do Non-Income Taxes Affect Real Operating Decisions? An Analysis of Crude Oil Inventories.”

Contemporary Accounting Research, Volume 32, Issue 2, Summer 2015, pages 736–762.

Ph.D. candidate Zach Kowaleski (BBA ’08, MAcc ’09) and Kris Allee were awarded a research grant through the graduate school and Wisconsin Alumni Research Foundation (WARF) to support an ongoing research project.

Dhaliwal, Dan S. and Gaertner, Fabio B. and Lee, Hye Seung and Trezevant, Robert. “Historical Cost, Inflation, and the U.S. Corporate Tax Burden.” Journal of Accounting and Public Policy (forthcoming, 2015).

M. Keune (Ph.D. ’10) and K.M. Johnstone. “Audit committee incentives and the resolution of detected misstatements.” Auditing: A Journal of Practice & Theory 2015 (forthcoming).

T.S. Hsieh, J.C. Bedard (MS ’79, Ph.D. ’85), and K.M. Johnstone. “CEO overconfidence and earnings management,” Journal of Business Finance & Accounting 2014 (41, 9 & 10): 1243-1268.

K.M. Johnstone, C. Li, and S. Luo. “Client-auditor supply chain relationships, audit quality, and audit pricing,” Auditing: A Journal of Practice & Theory 2014: 33 (4): 119-166.

K. Ittonen, K.M. Johnstone, and E. R. Myllymäki. “Audit partner public-client specialization and client abnormal accruals,” European Accounting Review 2014: 1-27.

K.M. Johnstone, A. Gramling, and L. Rittenberg. Auditing: A Risk-Based Approach to Conducting Quality Audits, Tenth Edition, Cengage Publishing, 2015

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Sanjay Gupta, Rick Laux, Dan Lynch. “Do Firms Use Tax Reserves to Meet Analysts’ Forecasts? Evidence from the Pre- and Post-FIN 48 Periods,” Contemporary Accounting Research (forthcoming).

Sanjay Gupta, Dan Lynch. “The Effects of Changes in State Corporate Income Tax Enforcement on Tax Collections” Journal of American Taxation Association (forthcoming).

Ella Mae Matsumura was a keynote speaker at the Japanese Management Accounting Association Conference at Waseda University in Tokyo in April 2015. Also in April 2015, Matsumura gave research presentations at Kobe University (Kobe, Japan), National Chengchi University (Taipei, Taiwan), Seoul National University (Seoul, South Korea), and Peking University (Beijing, China) on a paper titled “Sources of Customer-Base Concentration and Supplier Performance.”

Lipson, J., Martin, R. (UW Ph.D. student), Matsumura, E. M., and Unlu, E. “The Pattern in Securitization and Executive Compensation: Evidence and Regulatory Implications.”

Stanford Journal of Law, Business & Finance (forthcoming).

Stacie Laplante presented her research at a number of venues this year. She presented her research titled “Strategic Cost Classification and the R&D Tax Credit” at the European Accounting Association’s annual meeting in Glasgow and the American Accounting Association’s annual meeting in Chicago. She presented her research titled “Estimating the Likelihood of Trapped Cash” at Northeastern University, William and Mary University, the European Institute for Advanced Studies in Management’s 5th Workshop on Current Research in Taxation, and the 1st Berlin-Vallendar Tax Conference.

In addition, Stacie was invited to discuss other research at the European Accounting Association’s annual meeting and at the 5th Workshop on Current Research in Taxation.

Luft, Joan L. and Shields, Michael D. and Thomas, Tyler F. “Additional Information in Accounting Reports: Effects on Management Decisions and Subjective Performance Evaluations Under Causal Ambiguity.” Contemporary Accounting Research (forthcoming).

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DEPARTMENT UPDATES Farewell Judy With mixed emotions we said goodbye to Department Academic Specialist Judy Schaeffer. Judy had been with the department since 2006 and with the university for 38 years. Judy proved to be a wonderful ambassador for the department in her interactions with students, faculty, staff, alumni, and other guests.

Judy retired in May and plans to spend her extra free time doting on her grandchildren. In recognition of her service to the department and WSB, Judy was awarded the Gaumnitz Distinguished Classified Staff Award at the School’s annual spring awards ceremony; a well-deserved recognition.

Judy Schaeffer collects her official union chairs from Terry Warfield at her going away party in March

Welcome Michele

Expanded Roles

The department is thrilled to welcome Michele Parker as our new department academic specialist. Michele comes to the department with nearly 20 years of service to the university, first in the School of Veterinary Medicine and most recently as a program assistant in the dean’s office.

Welcome, Michele!

The department is excited to expand the roles of lecturers Russell Epp and Lindsay Acker. In addition to expanding their respective teaching loads, Russell has taken on the role of faculty adviser for the IMA student group and Lindsay as the faculty adviser for the Madison Business Mentoring student group.

Advisory Board With gratitude for his service, the department said goodbye to long-time advisory board member Mike Altschaefl (BBA ’81). Altschaefl is a graduate of the accounting program and provided valuable insight to department leadership over the years.

The department welcomes Jason Schultz (BBA ’98, MAcc ’99, MBA ‘08) to the advisory board.

Advisory Board Member Mike Altschaefl was recognized at the department’s annual fall award’s banquet for his service 22

ACCOUNTING & INFORMATION SYSTEMS | YEAR IN REVIEW

ADVISORY BOARD

Department of Accounting and Information Systems Advisory Board

Isabel Bartos* Financial Reporting Analyst Journal Communications, Inc.

Neil Lonergan* Managing Director Grant Thornton LLP

Steven Carter* Vice President and Corporate Controller SC Johnson & Son, Inc

Tim Mattke* Executive Vice President – CFO MGIC Investment Corporation

Robert J. Cottingham* Partner Wipfli LLP

Derek Matzke* Assurance Senior Manager BDO

Dianne Dubois* CFO Say Media, Inc.

Amy Mutziger* Assistant Corporate Controller Johnson Controls, Inc.

Wayne Ehlert* Partner and Regional Risk Leader Baker Tilly Virchow Krause LLP

Jason Schultz* Director Northwestern Mutual Investment Management Company, LLC

Katherine Feucht* Deloitte AERS Partner David Gay* Partner EY

Todd Watchmaker* Partner KPMG LLP Ray Wilson Partner PwC

* Alumni

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DEPARTMENT OF

ACCOUNTING & INFORMATION SYSTEMS

STAY IN TOUCH TERRY WARFIELD

KRISTEN FUHREMANN

Department Chair PwC Professor in Accounting terry.warfield@wisc.edu 608-262-1025

Director of Professional Programs in Accounting kristen.fuhremann@wisc.edu 608-262-0316